RUSH TRANSCRIPT I ll ░░░░░░░░ it to Morgan Brennan ░░░░░░░░ John Fortt Monday reversal ░░░░░░░░ the major indexes finish ░░░░░░░░ The action is just ░░░░░░░░ started Welcome to closing ░░░░░░░░ overtime I m Morgan ░░░░░░░░ with John Fortt We ░░░░░░░░ going to get results ░░░░░░░░ mgm chegg and many ░░░░░░░░ Plus we re going ░░░░░░░░ talk to the CEO ░░░░░░░░ eqt Joining us now ░░░░░░░░ Brian levitt and Brian ░░░░░░░░ Brian your take on ░░░░░░░░ markets here and the ░░░░░░░░ decision on Wednesday What ░░░░░░░░ priced in here We ░░░░░░░░ in a recession over ░░░░░░░░ year ago we ve ░░░░░░░░ in a softish landing ░░░░░░░░ the beginning of the ░░░░░░░░ and we ve been ░░░░░░░░ around now the market ░░░░░░░░ waiting to see what ░░░░░░░░ s next catalyst is ░░░░░░░░ the Fed going to ░░░░░░░░ back off its tightening ░░░░░░░░ and set the stage ░░░░░░░░ the new market cycle ░░░░░░░░ is it going to ░░░░░░░░ less explicit I expect ░░░░░░░░ won t get an ░░░░░░░░ until Wednesday I think ░░░░░░░░ re at the end ░░░░░░░░ the tightening cycle which ░░░░░░░░ the stage for a ░░░░░░░░ market environment David how ░░░░░░░░ you see it It ░░░░░░░░ that based on some ░░░░░░░░ the mashtrketing is pricing ░░░░░░░░ the end of the ░░░░░░░░ raising rates Financial conditions ░░░░░░░░ could argue with stocks ░░░░░░░░ as much as they ░░░░░░░░ and credit spreads being ░░░░░░░░ calm at least in ░░░░░░░░ weeks maybe not the ░░░░░░░░ news for the Fed ░░░░░░░░ s looking at those ░░░░░░░░ I think there s ░░░░░░░░ nuance than that I ░░░░░░░░ some financial conditions credit ░░░░░░░░ don t look too ░░░░░░░░ The stock market s ░░░░░░░░ reasonably good The reality ░░░░░░░░ liquidity is a better ░░░░░░░░ of where they are ░░░░░░░░ just the overall financial ░░░░░░░░ liquidity is definitely very ░░░░░░░░ From the bank deposit ░░░░░░░░ to the quantitative tightening ░░░░░░░░ agree they re at ░░░░░░░░ end of a tightening ░░░░░░░░ Then this invites the ░░░░░░░░ question which is recessionary ░░░░░░░░ will there be a ░░░░░░░░ recession recession or a ░░░░░░░░ one Within the market ░░░░░░░░ s nuances and that ░░░░░░░░ where I think investors ░░░░░░░░ opportunity I think there ░░░░░░░░ stuff within the market ░░░░░░░░ s cheap David you ░░░░░░░░ said you expect the ░░░░░░░░ won t hike and ░░░░░░░░ be cutting by the ░░░░░░░░ of the year if ░░░░░░░░ do hike this week ░░░░░░░░ means they ll be ░░░░░░░░ that much more Explain ░░░░░░░░ me how we get ░░░░░░░░ it seems like it ░░░░░░░░ take a pretty painful ░░░░░░░░ to get the Fed ░░░░░░░░ cut from here given ░░░░░░░░ employment levels are tightness ░░░░░░░░ the labor markets the ░░░░░░░░ indicators that Morgan mentioned ░░░░░░░░ has to happen do ░░░░░░░░ have to have a ░░░░░░░░ debt ceiling showdown What ░░░░░░░░ you expect has to ░░░░░░░░ Let s look at ░░░░░░░░ the market is saying ░░░░░░░░ re showing a fed ░░░░░░░░ rate 200 basis points ░░░░░░░░ than it is now ░░░░░░░░ you look at a ░░░░░░░░ point at a time ░░░░░░░░ they re looking at ░░░░░░░░ cuts It could be ░░░░░░░░ than that it could ░░░░░░░░ longer what causes that ░░░░░░░░ inflation number is not ░░░░░░░░ when you strip out ░░░░░░░░ shelter number and you ░░░░░░░░ why would you strip ░░░░░░░░ shelter because they know ░░░░░░░░ s obsolete it s ░░░░░░░░ The lag is showing ░░░░░░░░ 5 inflation in something ░░░░░░░░ might have 2 deflation ░░░░░░░░ Soaking wet it doesn ░░░░░░░░ have 1 to 2 ░░░░░░░░ that brings the CPI ░░░░░░░░ below 3 Brian do ░░░░░░░░ agree with that that ░░░░░░░░ the market has it ░░░░░░░░ where rates are going ░░░░░░░░ be in a few ░░░░░░░░ the Fed isn t ░░░░░░░░ with that I find ░░░░░░░░ hard to believe we ░░░░░░░░ see that many rate ░░░░░░░░ between right now and ░░░░░░░░ year and a half ░░░░░░░░ now I agree inflation ░░░░░░░░ coming down rapidly and ░░░░░░░░ is even lower than ░░░░░░░░ the headline number is ░░░░░░░░ us or weaker than ░░░░░░░░ the headline number is ░░░░░░░░ us I think the ░░░░░░░░ Reserve will be on ░░░░░░░░ for a while and ░░░░░░░░ a better understanding of ░░░░░░░░ all the effects of ░░░░░░░░ this policy tightening is ░░░░░░░░ to be on the ░░░░░░░░ it takes time to ░░░░░░░░ its way through the ░░░░░░░░ look the likelihood of ░░░░░░░░ muddling through this or ░░░░░░░░ more mild recession is ░░░░░░░░ I mean we ve ░░░░░░░░ through this with the ░░░░░░░░ market remaining relatively strong ░░░░░░░░ remaining relatively strong Can ░░░░░░░░ muddle through this will ░░░░░░░░ critical I don t ░░░░░░░░ it to be a ░░░░░░░░ downturn yes we had ░░░░░░░░ inflation and policy tightening ░░░░░░░░ we never got to ░░░░░░░░ point of significant excess ░░░░░░░░ regards to the leverage ░░░░░░░░ corporate balance sheets or ░░░░░░░░ bank balance sheets any ░░░░░░░░ of downturn is likely ░░░░░░░░ be more modest in ░░░░░░░░ which suggests last year ░░░░░░░░ 25 decline in the ░░░░░░░░ largely priced for it ░░░░░░░░ means the Federal Reserve ░░░░░░░░ probably on pause to ░░░░░░░░ lower rates over the ░░░░░░░░ year but certainly not ░░░░░░░░ for eight cuts